In The News Today

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My Dear Extended Family,

What drives me forward confidently no matter what is thrown at us.

You are my community.

Jim

All the elements are abundant in Nature and are precious and potent with Divinity. So use them in moderation, reverentially, with humility and gratefulness. Excessive or inappropriate usage will injure your well-being just as drinking more or less water than needed is a torture. Inhaling more air is suffocating. Fire in moderation can warm

or serve to heat and melt, but beyond a certain limit, it is a holocaust. Even excessive use of sound will distract people and drive them crazy. Hence, learn to use the natural resources intelligently, in moderation, with the idea of loving service to all in the community.
–SSB, Oct 15, 1966.

Jim Sinclair’s Commentary

I consider Arabian Money to be a sound source of information.

Some say you cannot fight the US Fed. Right now there is battle setting up in the bond market of the usual home spun vigilante suspects versus the Fed and QE. Maybe you can’t fight them, but there are forces out there now due to the transition of economic power to other CBs that not only can fight major other central banks, but could flatten any central bank anywhere, if such was determined to be in their best interests.

The BRICS and Euroland could be formidable in this pending battle. You know that we are in a currency war, and have been for years. The old lion is the US dollar and the new, very rich, and wise guys on the BRIC block are the young lions. My money is on the young lions.

This is where the battle is headed without any doubt. The euro battle may be over regardless of ZH sensationalism.

China plans to double gold consumption in three years, how high will gold prices go now?
Posted on 06 December 2012

China’s Ministry of Industry and Information Technology announced that it expected Gold consumption in the country would be running at more than double national gold production by the end of 2015, more than double Chinese gold consumption forecast for 2012.

According to the MIIT statement, domestic demand is set to surpass 1000 tons by the end of 2015. It said this would ‘widen the fundamental market shortage’ and noted that the shortage of supply will persist in the coming few years as domestic gold supply ‘might only reach 450 tons by that time.’

Official gold policy

The ministry promised: ‘In order to strengthen the gold industry the government will increase gold mine investment, speed up industry consolidation and international cooperation. It also said it would ‘develop gold trading platforms and investment variety (presumably meaning ETFs).

‘With regard to acceleration of industry consolidation, the government aims to lower the number of gold producers in the country to 600 companies by the end of 2015 from the current 700. And, the top 10 gold producers could be responsible for 260 tons of total output, up from 100 tons, by the end of 2015.’

ArabianMoney readers will not be too surprised to hear that China now has big plans for gold. Only recently we published the thoughts of ‘Mr. Gold’ Jim Sinclair who forecasts $3,500 an ounce gold and higher is coming on the back of Chinese demand (click here).

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Jim Sinclair’s Commentary

Remember regardless of all the BS flying, the US Federal Reserve has no available option to stop or curtail QE. Should they do such a thing, financial armageddon will occur in the longer bond market with an impact so great Western finance will not recover until 2035.

The screw up will be monumental in its Western world economic devastation that whatever Fed governor sits as Chairman will have to resign in total disgrace.

QE is going to infinity!

Money for Nothin’ Writing Checks for Free
William H. Gross
January 2013

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It was Milton Friedman, not Ben Bernanke, who first made reference to dropping money from helicopters in order to prevent deflation. Bernanke’s now famous “helicopter speech” in 2002, however, was no less enthusiastically supportive of the concept. In it, he boldly previewed the almost unimaginable policy solutions that would follow the black swan financial meltdown in 2008: policy rates at zero for an extended period of time; expanding the menu of assets that the Fed buys beyond Treasuries; and of course quantitative easing purchases of an almost unlimited amount should they be needed. These weren’t Bernanke innovations – nor was the term QE. Many of them had been applied by policy authorities in the late 1930s and ‘40s as well as Japan in recent years. Yet the then Fed Governor’s rather blatant support of monetary policy to come should have been a signal to investors that he would be willing to pilot a helicopter should the takeoff be necessary. “Like gold,” he said, “U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

Mr. Bernanke never provided additional clarity as to what he meant by “no cost.” Perhaps he was referring to zero-bound interest rates, although at the time in 2002, 10-year Treasuries were at 4%. Or perhaps he knew something that American citizens, their political representatives, and almost all investors still don’t know: that quantitative easing – the purchase of Treasury and Agency mortgage obligations from the private sector – IS essentially costless in a number of ways. That might strike almost all of us as rather incredible – writing checks for free – but that in effect is what a central bank does. Yet if ordinary citizens and corporations can’t overdraft their accounts without criminal liability, how can the Fed or the European Central Bank or any central bank get away with printing “electronic money” and distributing it via helicopter flyovers in the trillions and trillions of dollars?

Well, the answer is sort of complicated but then it’s sort of simple: They just make it up. When the Fed now writes $85 billion of checks to buy Treasuries and mortgages every month, they really have nothing in the “bank” to back them. Supposedly they own a few billion dollars of “gold certificates” that represent a fairy-tale claim on Ft. Knox’s secret stash, but there’s essentially nothing there but trust. When a primary dealer such as J.P. Morgan or Bank of America sells its Treasuries to the Fed, it gets a “credit” in its account with the Fed, known as “reserves.” It can spend those reserves for something else, but then another bank gets a credit for its reserves and so on and so on. The Fed has told its member banks “Trust me, we will always honor your reserves,” and so the banks do, and corporations and ordinary citizens trust the banks, and “the beat goes on,” as Sonny and Cher sang. $54 trillion of credit in the U.S. financial system based upon trusting a central bank with nothing in the vault to back it up. Amazing!

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Jim Sinclair’s Commentary

The way to test this technology is to purchase a rubber Jeffrey Dahmer mask and stand in front of any busy corner in LA.

California gets face scanners to spy on everyone at once
Published: 19 November, 2012, 07:44

Facial recognition technology is expected to soon be the norm among law enforcement

In a single second, law enforcement agents can match a suspect against millions upon millions of profiles in vast detailed databases stored on the cloud. It’s all done using facial recognition, and in Southern California it’s already occurring.

Imagine the police taking a picture: any picture of a person, anywhere, and matching it on the spot in less than a second to a personalized profile, scanning millions upon millions of entries from within vast, intricate databases stored on the cloud.

It’s done with state of the art facial recognition technology, and in Southern California it’s already happening.

At least one law enforcement agency in San Diego is currently using software developed by FaceFirst, a division of nearby Camarillo, California’s Airborne Biometrics Group. It can positively identify anyone, as long as physical data about a person’s facial features is stored somewhere the police can access. Though that pool of potential matches could include millions, the company says that by using the “best available facial recognition algorithms” they can scour that data set in a fraction of a second in order to send authorities all known intelligence about anyone who enters a camera’s field of vision.

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Jim Sinclair’s Commentary

No problem here. Just go to any major high frequency trading firm, and offer bigger money to the silly looking nerd writing the HFT software.

Japan Is Running Out Of Ninjas
By Geoffrey Ingersoll | Business Insider – Fri, Nov 23, 2012 1:52 PM EST

Ninjas were some of the world’s first elite commandos, capable of targeted assassinations as well as espionage in Japan’s feudal times.

Now, there’s only a handful left.

Mariko Oi of the BBC reports that Japan is down to one or maybe two certifiable ninja masters. Though they’re very much alive in Hollywood, the art itself, one traditionally handed down from father to son, is facing extinction.

The BBC report states that aside from their obvious lack of demand, ninja methods and techniques were considered "top secret" by their practitioners, leading to institutional shortages of public information.

Jinichi Kawakami, Japan’s last ninja grandmaster, tells the BBC he started learning as a child, at about 6 years old.

"I thought we were just playing and didn’t think I was learning ninjutsu," he said to Oi. "I even wondered if he was training me to be a thief because he taught me how to walk quietly and how to break into a house."

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Jim Sinclair’s Commentary

I will be 72 shortly, so I can say this. Geizers are totally screwed. Retirees are simply cannon fodder. The society that fails to respect their elders is on a path to extinction. The society that puts its elderly in harm’s way will not survive. The society that totally abandons its elderly is finished, but may not yet know it.

Western world society has lost respect for, put in harm’s way and abandoned its elderly. Karma will be a bitch.

Banksters are not immune from Karma, in fact they are in its cross hairs.

Retirement no more: Median net worth at lowest level since 1969 recent study finds.

There may be a temporary jubilee with the notion that the fiscal cliff has been deferred for a few months.  The media is quick to accept anything for a victory but very little has been done to stop our marching path onward on this massive debt spiral.  Many Americans continue to live in poverty with no visible exit.  The latest figures show over 47 million Americans on food assistance.  Many Americans as they enter their golden years are coming to fully rely on Social Security, a system that was on the table for being cut in the recent debates.  Since the Fed is creating asset bubbles and destroying fixed income investments, many older Americans are realizing that retirement is no longer a viable option given the rising costs in food, healthcare, and once again housing.  I see this on a monthly basis where you can spot older Americans in non-traditional and many times, temporary employment roles.  None of this intervention is ending up in household income.  In fact, when we examine real wealth the net worth of American’s is down to the lowest levels since 1969 when adjusting for inflation.

A return home

Many baby boomers are being greeted with a grim reality.  Retirement may not be an option.  A recent paper from New York University highlights some dramatic figures for net worth data from 1983 to 2010.  The study found that 2010 median net worth in the United States hit its lowest point since 1969.  This research aligns with other figures we have found from the Fed Consumer Finance Survey:
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